Consolidation and sub-division of shares
A company's shares must have a 'nominal' value which in most companies, is £1. This nominal amount will be registered at Companies House when the company is first registered and the company cannot issue its shares for less than this amount. It is possible to change the nominal value of the shares to a smaller or greater nominal value. For example, a company with a share capital of £100 divided into 100 £1 shares may consolidate and sub-divide its capital into 1,000 10p shares or 10,000 1p shares or ten £10 shares.
The nominal value of the shares need not bear any relation to their market value. Many companies are set up with a share capital of £100 or less. To take an extreme case, the a company that has issued just one £1 share, but which has established a successful business may well have a market value of thousands of pounds, and the one share will represent all that value. If the owner of the share wants to sell or give away part of his shareholding, the share may be divided into, say, ten 10p shares, so he can dispose of one or more of them. (any alternative would be for the company to issue bonus shares to him so that he has more £1 shares).
Any consolidation and sub-division must be approved by the directors and the shareholders and must be registered at Companies House. If the shares are not fully paid, the ratio of paid to unpaid amount on each share must be maintained. If only some of the shares are sub-divided there may be complications to resolve as shareholders' rights may be affected.
- guidance as to the applicable procedures
- notices of directors' meetings
- minutes of directors' meetings
- notices of shareholders' resolutions
- shareholders' consents to resolutions
- notices for Companies House
- completed official forms for Companies House
- our straightforward, step by step guide to completing the procedures
- checking by us when the documents are completed (if required)
- dispatch by us to Companies House of the completed and checked documents (if required)
- guidance on completion of share certificates
- guidance on completion of statutory registers
If we required, we can supply share certificates and/or statutory registers as an additional service.